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Top Ranked – Market Testing

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In this episode we talk about pricing and more generically about market testing.  I know, I know, marketing is probably not every coders favorite subject.  I bring it up as I’ve noticed many apps in the marketplace that are underpriced.  Apps that are cool, differentiated or do something of great value to the consumer can clearly support higher price points.  No user is ever going to ask you to charge them more for your app so the task of picking the right price point falls on you.  The easiest way to do that is to do market testing aka A/B testing (or split testing, bucket testing etc.).  In this episode I refer specifically to price testing for paid apps but this technique could easily be used to test for other things that might increase revenue in paid apps or downloads in free apps.  All sorts of things like categories,  descriptions, keywords, or artwork can be affect the performance of your app and so could be optimized.

View or download the video on Channel 9 (includes higher quality video)

As I mentioned above, from what I’ve seen in the marketplace many developers will underprice their apps.  They seem to be optimizing for number of downloads.  That is indeed what you want for free or ad-supported apps but for paid apps you probably want to optimize for revenue and that formula is a simple one everyone knows: revenue = paid downloads x price.  If you optimize for downloads then likely you are in a race to the bottom; i.e. how fast you can get to the $0.99 price point.

Since you have 2 variables to optimize and only one which you have any control over, the easiest way to optimize for revenue is to test different price points and watch the number of paid downloads at each point.  Obviously if you want to maximize revenue then you want to get the highest price possible for your app.  To do that start at a high price.  Over time you may need to drop the price (e.g. for competitive reasons or for sales or promotional events).

So the obvious question is: how do I do market testing on the Windows Phone marketplace?  Since you cannot vary pricing by market in the marketplace the way I recommend is to submit the same app with the same metadata twice.  You would do that to two different markets that have very similar buying behavior.  Examples of markets that have similar buying behavior are US/Canada, France/Belgium, Germany/Austria, or Australia/New Zealand.  By doing this you can do your A/B testing; i.e. by maintaining all things equal except for pricing then you can figure out what price the market will bear for your app. 

Let me know what you think about this episode of Top Ranked.

If you have questions about any of the videos, about problems or issues you’re hitting or if you have topics that you think would be of interest to other devs on the Windows Phone platform then drop me a note. I’d be particularly interested in hearing about some of the best practices you’ve adopted that you think have raised your quality or your ratings/ranking in the Marketplace. I’ll be sure to give full credit and link love whenever I can.

The Top Ranked series is hosted on Channel 9. You can view all the past videos there. You can also subscribe to the entire series via Zune or iTunes. All that is available here:
https://channel9.msdn.com/Series/Top-Ranked

Let me know what you think by dropping me a note via the contact form on my blog here:
https://blogs.msdn.com/b/benriga/contact.aspx

Or better yet follow me on twitter and drop me a note there:
https://twitter.com/benriga

Technorati Tags: Windows Phone,Windows Phone Development,wpdev,Windows Phone Marketplace,Market Testing,A/B Testing

Comments

  • Anonymous
    February 01, 2012
    Hello Ben, thank you for writing the interesting post.As we know the marketplace has a strange situation with paid apps. There is big difference in number of downloads between a paid app with trial that as ads vs. a free app with ads, although practically both are equivalent.So, if one starts with a higher price then the total number of downloads are going to be further low.And we also know that marketplace decides the ranking in paid app categories based on total number of downloads or at least that plays a significant role.Thus by pricing higher, you reduce total downloads and lose ranking/position. And I guess not many users will scroll beyond the top 100 apps in a list/category.On a side note, search is another important functionality to discover apps but it's completely broken in marketplace at the moment. I think it should be powered by a real engine link Bing.Regarding A/B testing, I guess it's not possible for an app which is already published to all regions. Right?Looking forward to your thoughts on above.Thank you.Gaurav (@ngreader)